Real estate across the country has certainly been crazy over the past three years, but the housing market in Ohio still looks pretty sane. This isn’t California or Massachusetts, and that’s a good thing for house-hunters: Homes in the Buckeye State are significantly more affordable than in many other states around the country, and prices here tend to be far below national levels. Read on for everything you need to know about the cost to buy a house in Ohio.
How much does it cost to buy a house in Ohio?
The average price of a home in Ohio was $275,461 as of September 2023, according to statistics from Ohio Realtors. That’s quite a bit lower than the nationwide median price for the same month, which was $394,300.
Depending on where you’re hoping to call home in the state, though, your budget may look a bit different. Consider the average sale prices in some of the most popular cities: In Cincinnati, the average was $319,310; in Columbus, $348,569; and in Dayton, $261,583.
Outside the bigger cities, you’ll find a smaller price point. For example, the average sale price was around $203,000 in Ashland and Athens, and less than $200,000 in both Mansfield and Lancaster.
It’s helpful to focus on how a home’s price tag will translate into your monthly payments as its owner, especially with today’s high mortgage rates. Consider the monthly obligation on a $275,000 home, assuming a 20 percent down payment on a 30-year mortgage with a 7.5 percent interest rate: According to Bankrate’s mortgage calculator, that scenario would result in principal and interest payments of $1,538 a month (not including the additional costs of property taxes and homeowners insurance).
Down payment
How much money have you saved for a down payment? This upfront cost is crucial, because the more you are able to pay upfront, the less you have to borrow.
You don’t have to put down 20 percent, necessarily, although that is the magic number to avoid paying an extra monthly premium for private mortgage insurance. Here are the minimum down payment requirements for some of the most popular types of home financing (if you qualify):
Conventional loans: 3 percent
FHA loans:5 percent with a credit score of at least 580, or 10 percent with a credit score between 500 and 579
VA loans: No down payment required for qualifying military service members or veterans
USDA loans: No down payment required if you buy a rural property that meets specific criteria
One piece of good news for first-time buyers: Ohio has some generous first-time homebuyer programs that can help you cover your down payment and closing costs. You’ll need to meet certain qualifications for credit score, income and purchase price to be eligible.
Closing costs
According to data from Core Logic’s ClosingCorp, closing costs in Ohio add on another 2 percent of the purchase price — approximately $5,500 on an average-priced $275,461 Ohio home. That amount isn’t all coming out of your pocket, though. Closing costs are split between buyers and sellers.
Costs that are the buyer’s responsibility will include a variety of fees charged by your lender for things like a credit check and loan origination, as well as a required appraisal of the home’s value. You’ll also want to get a home inspection to verify the home’s condition. Lenders typically like to see a cushion that will keep you protected in the event of an emergency, too, so make sure you set aside some extra cash in reserve.
Cost to move
Don’t forget about the additional expense of moving all your stuff to your new Ohio home. According to HomeAdvisor, the average cost of a local move is just over $1,700. If you’re moving long-distance to get to Ohio, though, you’ll need to set aside a lot more money. A cross-country move has an average price tag of $4,617.
Homeownership costs
Once you buy a house in Ohio, you’ll need to be prepared to pay for its upkeep. While there’s no crystal ball for home maintenance costs, State Farm advises homeowners to budget between 1 and 4 percent of their home’s value for annual upkeep. On an average-priced Ohio home, that means you should plan to set aside up to $11,018 each year for upkeep.
You’ll also need to plan for property tax costs. In Ohio, the typical homeowner paid $3,235 to the government in property taxes in 2022. And don’t forget to budget for your homeowners insurance coverage, too, as well as HOA fees if your new home is part of a homeowners association.
Reducing the costs to buy a house in Ohio
Buying a house can seem overwhelmingly challenging, especially with today’s high mortgage rates. Consider these options to reduce your costs:
Ask for seller concessions: Across the country, more sellers are agreeing to cover a portion of the buyer’s closing costs, according to a report by Redfin. Don’t hesitate to ask a seller if they’re willing to help out with some of your costs. They don’t have to say yes, but they also don’t want to see you walk away from the deal.
Cast a wide net: If you have a flexible work arrangement that doesn’t require you to be in one specific location, look at cheaper locations beyond where your job is based. And if you don’t need a huge amount of space, a condo or townhouse is a great way to achieve homeownership for a lower price than a single-family home.
Hold out for longer: It’s OK to press pause if you think now just isn’t the right time. Mortgage rates are the highest they have been in more than two decades. There’s no guarantee they’ll come down, but taking some time to build your savings and your credit score while you wait might not be a bad idea.
Next steps
While Ohio’s home prices are certainly more appealing than many other parts of the country, buying a house here is not necessarily easy. For example, Redfin data shows that the typical home in Columbus gets four offers, which shows that the Buckeye housing market can feel just as competitive as Big Ten football. With that in mind, make sure you have an experienced local real estate agent on your team.
FAQs
As of September 2023, the average sale price for a home in Ohio was $275,461, according to data from Ohio Realtors.
No, they are increasing. Between September 2022 and September 2023, the average sales price in the Buckeye State rose 5.9 percent, according to Ohio Realtors data.
Yes — buyers pay some portion of closing costs in every state, including Ohio. These typically include an array of fees charged by the mortgage lender, among others.
Interest rates on 30-year fixed-rate mortgages have hit yet another high, with lenders offering loans above 8% for the first time since 2000. Mortgage rates have gone up rapidly this year, rising two full percentage points from lows near 6% back in February.
That’s been brutal for home buyers, who have watched their buying power erode. At a 6% interest rate, a buyer looking to spend $2,000 a month on principal and interest could afford a loan of roughly $333,500. With interest rates at 8%, that same buyer can afford only $272,500. Their target home price has dropped $61,000 as more of that monthly payment has to go toward servicing interest.
Here’s why mortgage interest rates are so high, and why they could remain elevated. Still, there are ways that home buyers can contend with such a challenging housing market.
Mortgage loans from our partners
Why mortgage rates climbed so high
A year ago, many housing economists, including in forecasts from Fannie Mae and the Mortgage Bankers Association, were anticipating that today’s mortgage rates would be in the 5%-6% range. Though that seems wildly off base now, at the time it looked pretty reasonable.
“Last year around this time, the Fed was in the midst of hiking interest rates very rapidly,” explains Chen Zhao, head of economic research at Redfin. “And most economic forecasters were really looking at this and saying, OK, this is most likely going to lead to a recession.”
A recession could have forced the Federal Reserve to cut interest rates, with mortgage rates likely falling, too. But that recession hasn’t arrived.
“Despite what the Fed has done, hiking rates at the fastest rate ever, the economy, especially the job market, has really just remained very resilient. As a result, investors are now expecting that the economy is going to avoid a recession and remain very strong for longer,” Zhao says. “And that means that the economy can sustain higher mortgage rates for a longer amount of time.”
Where are mortgage rates headed in 2024?
Looking at last year’s predictions for 2023, it’s clear that a lot can change in just a few months. With political upheaval in the U.S. and multiple wars overseas, there’s potential for tectonic shifts in markets and in economic policy.
“I would say that right now uncertainty is unusually high,” Zhao comments. “Maybe the most plausible forecast would be to say that rates are probably going to stay in this range for the near term or at least in the foreseeable future.” But Zhao also outlines scenarios for mortgage rates going lower — an economic downturn forcing the Federal Reserve to encourage economic activity by easing interest rates — or higher, if mortgage spreads remain elevated.
The mortgage spread is the difference between the 30-year fixed mortgage rate and 10-year Treasury rate. “Historically, the spread between the 10-year Treasury and the 30-year mortgage rates is about 1 3/4%,” explains Melissa Cohn, New York-based regional vice president and mortgage banker at William Raveis Mortgage. Because of economic and geopolitical volatility, “Those spreads have grown over the course of the past couple of years, and our mortgage rates are now trading at 3% or higher above the 10-year Treasury.”
That said, it’s also worth noting that while we haven’t seen mortgage interest rates this high in 23 years, prevailing interest rates are in line with longer-term historical averages. Interest rates collected by government-sponsored enterprise Freddie Mac, which go back to 1971, are widely used as the yardstick for mortgage interest rates. Over that half century, the average 30-year fixed interest rate has been 7.74%.
“Looking holistically at the entire history, we’re about where the average is,” comments Jessica Lautz, deputy chief economist and vice president of research for the National Association of Realtors. Lautz points out that recent history is fairly exceptional: “We don’t want to say that the interest rate of 18 is normal, but the interest rate of 2.5 is also not normal,” she says, referring to historic highs of the early 1980s and the low point of 2020. “Both of those were very unusual time periods for interest rates.”
How high rates might affect buyers’ plans
Higher interest rates have got home buyers scrambling to keep their budgets in line with costs. But buyers should also consider the wider effects that rates have on the housing market and how these could play out.
Cohn contends that those who can afford to buy now, despite high interest rates, are likely better off going ahead with a purchase, as home prices continue to rise. “Are you better off buying in the higher-rate environment today and paying hundreds of dollars more a month in a mortgage payment so that you can refinance in a year when rates are down instead of having to pay 5% more on the purchase price of that home in a year?” she asks. This argument assumes interest rates will drop, but it’s also worth noting that while today’s buyer waits for rates to fall, they’re building equity.
Lautz also leans toward acting now if you can, but for different reasons. With housing inventory limited, a drop in interest rates could bring currently priced-out buyers off the sidelines, driving up home prices. “I do think there is pent-up demand,” Lautz explains, “and so they may be facing a multiple-offer situation.” In other words, lower rates could lead to the return of bidding wars.
Mortgage loans from our partners
What home buyers can do now
If you’re in the position to buy a home despite today’s mortgage rates, there are a few steps you can take to buffer the effects of high rates.
Get all the help you can: If you’re a first-time home buyer, look into state and local programs that provide down payment and closing cost assistance. These can be no- or low-interest loans or even outright grants. You may not even have to be a true first-timer: Many programs consider you a first-time home buyer if you haven’t had an ownership interest in a home in at least three years.
Consider a variety of home types: Rather than a detached, single-family home, a condo or townhouse might better suit your budget. New construction is worth a look, as newly built homes are nearly one-third of the current market. Home builders with robust inventories are often able to provide incentives that make new homes more affordable.
Be interest-rate-aware: When you’re researching sample interest rates at various lenders, read the fine print. With rates so high, many lenders are including discount points — prepaid mortgage interest — to make their sample rates appear lower. Buying points can be a good strategy, but there’s an upfront cost, so you want to know if they’re included when trying to decide which lender has the best rates for you.
Here’s everything you’ll need to know about how to rent a house, including how it’s different from apartment renting.
Maybe you have a growing family or elderly parents moving in. Perhaps you need a dedicated office or you’re craving outdoor space and more privacy than most apartment complexes offer.
If you can’t afford to buy your own home, you can upgrade your living arrangements by renting one. Still wondering how to accomplish this milestone, though? We’ll walk you through it step by step.
How renting a home is different than renting an apartment
While the renting process may be similar, there are large differences that any prospective tenants should be aware of, so their renting process runs smoothly. Navigating the local market is tricky enough, turn to this guide to delve into the must-knows for your home renting experience.
1. Your rent price will look drastically different
Before beginning your hunt for the perfect rental home, you’ll need to figure out what you can afford. Factoring in your income and recurring expenses including any loan payments, check out our helpful tool that will calculate average rents and the cost of living in major cities. You’ll notice upfront, that renting a house may be pricier, due to numerous reasons.
In addition to the monthly rent you’ll be forking over, there are other costs to consider that you may not have had to deal with as an apartment dweller. For example, things like heat, hot water, electricity, internet and satellite TV that are sometimes covered with an apartment rental will likely come straight out of your pocket when you rent a house.
Also, you might be responsible for lawn care, snow removal and other general maintenance, so if you don’t want to take care of those yourself, plan to budget for hiring out those tasks.
You’ll also need to know your credit score to see if you have to get a co-signer or guarantor — someone with good credit who would be liable for your rent if you can’t pay it. This will be added to your lease agreement should this be the case.
2. Your wants and needs will be more extensive
Once you’re clear on your budget, the fun part of researching houses for rent begins. It’s best to start by narrowing down your search to a few choice neighborhoods that offer the amenities you’re looking for, including proximity to work or your children’s schools. Due to the nature of a home (which lacks the built-in amenities an apartment has) your wants and needs for your ideal rental property will be longer.
It’s helpful to make a list of wants vs. needs to help you sort through your thoughts on your dream rental properties:
If you or your family are active or love nature, is the area close to parks and recreation centers?
Do you want a bustling neighborhood packed with restaurants, cafés and boutiques, or would you prefer a quiet, suburban environment?
Is a backyard important to you?
Do you need a garage or dedicated parking space?
Are you looking for a detached home to rent or are you okay with a townhouse?
Does the neighborhood have easy access to public transportation?
3. You’re sure to attend more tours and have more questions
Reading rental listings and taking a good look at the photos is typically not enough to determine whether a rental house might work for you.
While apartment complexes might post floor plans and room sizes online, you might not have advanced information like that with homes for rent. This means you’ll need to ask the landlord, property manager or rental property owner about many things that may not be explicitly listed:
Is the home pet-friendly?
Are appliances included, or would you need to purchase your own?
Is the house furnished? If it is, can you decide what stays or goes?
Are laundry hook-ups in place?
If utilities are not included in the monthly rent, how much can you expect to pay for heat, electricity and hot water?
Can you make decorative changes, such as painting the walls or changing light fixtures?
If there’s a backyard, can you plant a garden?
Is there a home owners association to which you will owe monthly fees?
4. Your neighborhood will be more important than ever
If you like the looks of a house for rent, and the landlord has answered questions to your satisfaction, make sure you also tour the area to get a sense of whether it would be a good fit for you and your family.
Try to speak to some potential neighbors, too: Ask them if it’s safe to walk the streets at night, whether it’s noisy and whether there are other children on the block.
It’s a good idea to visit the street both during the day and in the evening if possible. If the rental home does not have a garage or dedicated parking spot, check out whether street parking is readily available. It’s important to confirm that the right rent price takes into account the neighborhood and what it has to offer potential tenants.
5. There’s additional paperwork, like a home rental application
Paperwork for renting an apartment is a given, however, there tends to be a bit more when it comes to renting a home. Keep in mind, if the property is in a popular neighborhood in a hot real estate market, you won’t want to waste any before time letting the landlord know you’re ready to begin the application process.
Some property managers will charge you a fee between $25 to $100 before opening a file. Supply the following information to help the landlord determine if you are a good candidate to rent the house:
Your personal contact information
Proof of income. If you work full-time, pay stubs are sufficient. If you are self-employed, you can present bank statements or tax returns from the past three years. Retirees can provide proof of pension, 401(k) or bank statements.
Your guarantor’s name and contact information, if applicable
References who can vouch for your reliability and trustworthiness, such as a supervisor or former landlord
6. More rules you’ll have to adhere to
If your rental home has an HOA, you’ll need to check in with them to see if there are any regulations to follow on moving day, such as not leaving empty boxes at the curb when moving. There will likely also be regulations ranging from decorating to construction restrictions that the homeowner, in this case the landlord, will have to adhere to.
The similarities between renting an apartment and a house
There are some steps and parts of the renting process that don’t change even though the type of rental property does. There are similarities beyond the obvious of needing to pay rent and adhering to rental laws.
1. The background check
Landlords want tenants who have a steady income, a good loan repayment track record and a history of paying rent on time. Often, they will conduct a background check to assess whether they want to rent you their house.
During this part of the process, a property manager will likely want to confirm your employment, speak to the references you provided and check your credit report to see how you managed past payments.
2. The required fees such as a security deposit and first month’s rent
Some landlords will require a security deposit equivalent to a month’s rent, which would cover any damage to the property you might cause during the term of the lease. In some cases, you can either be refunded this fee when the lease is up or it goes to the last month’s rent.
You might also have to pay the first month’s rent once you sign a lease, even if you’re not moving in for a while. Sometimes, you’ll be charged a deposit for keys if you require more than one.
3. The moving process
While you won’t have to reserve an elevator to move into your rental home the way you did when you lived in an apartment, there are some things you need to organize before the big move.
For example, before you book a professional moving company, find out from the landlord if you can reserve a parking spot in front of the house where the truck can park, or whether it can back onto part of the property for easier unloading.
Once that’s done, you can concentrate on packing up and getting ready to move into your new home. Don’t forget to advise utility companies, internet and television providers and anyone else who needs to know you’re moving elsewhere.
Make sure to stay on top of details
Taking the time to research rental homes and neighborhoods and asking the right questions will make the transition from apartment living to a home rental go more smoothly.
Being organized with your paperwork and task list for moving day will provide peace of mind and fewer last-minute glitches so that you can celebrate once you’re settled into your new rental home.
And if you’re thinking about renting out your home for some passive income-generating opportunities, take a look at our rent estimator to see how much you could be earning.
Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.
Rent prices are on the rise, with the average cost increasing 18% between 2017 and 2022. But buying a home requires a hefty down payment and good credit. Renting to own your home can give you the best of both worlds, but there are some downsides.
If you’re thinking about signing a rent-to-own agreement, it’s important to weigh the pros/cons of rent-to-own home deals. Here’s what you need to know before you sign on the dotted line.
What are rent-to-own homes?
When you own a home, part of your monthly payments goes toward paying off the principal. If you stay in the home long enough, you’ll own it.
The same doesn’t apply to rentals. Your monthly rent solely covers your costs of living in that home, whether it’s a condo, apartment, townhouse, or single-family house.
A rent-to-own home lets you pay rent to live on the property, with the option to buy it when the lease runs out. In some cases, a portion of your rent goes toward the purchase price, but that isn’t always the case.
How does rent-to-own work?
A rent-to-own agreement is essentially a lease agreement with an option to buy. Rent-to-own contracts should be read thoroughly. Those options can vary from one contract to another.
When you sign a rent-to-own contract, you pay an upfront fee called an option fee. This is typically 1 to 5% of the home’s purchase price, and it’s non-refundable.
It’s important to note that a lease does not relieve you of the requirements to buy a house. You’ll still have to qualify for a mortgage and make a down payment. It’s merely a way to buy yourself some time and possibly put some of your rent toward the purchase price of a home.
Lease Option vs. Lease Purchase
Before you sign, pay close attention to the lease agreement you’re signing. There are two types, and one contractually obligates you to buy the property.
Lease Option Agreement
A lease option agreement is the best deal of the two for you, the buyer. You’re signing a lease option contract that merely gives you first rights to the house when the lease is up. If you change your mind, find a better deal, or can’t qualify for a mortgage, you can find somewhere else to live and move your belongings out.
Since the option fee is nonrefundable, it’s important to note that you will lose money if you choose not to buy. Calculate this loss when you’re deciding whether to buy.
Lease Purchase Agreement
Unlike a lease option agreement, lease purchase agreements obligate you to buy at the end of the lease. Since it’s a contract, that means you’re legally obligated to purchase the house.
This can be risky for a couple of reasons. Once you’re in the house, you may see issues you didn’t notice when you were first touring the house. Things could change with the neighborhood or your circumstances that you couldn’t know at the outset.
But the biggest issue with a lease purchase contract could simply be that you aren’t eligible for a mortgage to buy the house. Make sure you know, up front, what penalties or liabilities you’ll face if you can’t buy the house when your lease is up.
Even though both agreements operate differently on your end, they do obligate the seller to give you the option to buy when your lease expires. This puts you in a position to own a home at a predetermined future date, giving you the opportunity to start planning.
Length of a Rent-to-Own Agreement
Rent-to-own contracts start with a lease period that can be up to five years but is usually less than three. The thought is that the rental period will give a renter time to qualify for a mortgage. During this time, you’ll work on building your credit, if necessary, and saving for a down payment.
In some cases, a rent-to-own arrangement could have renewal terms. That means if you reach the end of the lease and want more time, you can extend the lease. With this option, though, the property owner could increase your monthly rent or the purchase price.
Preparing for Homebuying
During your lease term, you’ll make each monthly rent payment in exchange for remaining in the house. But it’s important during that time that you work toward purchasing the house when your time is up. Here are some things to do to boost your chances of landing a mortgage once your lease expires.
Boost Your Credit Score
Your rent-to-own deal requires that you qualify for a mortgage once the term is up. To do this, you will need to meet the minimum credit score requirements. You can get a free copy of your credit report each year at AnnualCreditReport.com, but there are also credit monitoring services that can help you stay on top of things.
Although requirements can vary from one lender to the next, Experian cites the following credit scores as necessary to land a mortgage:
FHA: If you qualify, a Federal Housing Association loan will accept credit scores as low as 500.
USDA loans: Those who meet the requirements can qualify with a score as low as 580.
Conventional loan: Generally 620 or higher, but some lenders require 660 at minimum.
VA loans: Eligible military community members and their families can obtain loans with scores as low as 620.
Jumbo loan: These loans cover houses at a higher price, so you’ll need a score of at least 700.
Save for a Down Payment
In addition to a good credit score, you’ll need to put some money down on your new home. Down payment requirements vary by loan type, but it’s recommended that you put at least 20% down. That means if you’re buying a $200,000 home, you’ll need at least $40,000 by closing.
There are lower down payment options, but if you choose those, your mortgage payments will include something called private mortgage insurance. This will increase your monthly payment by $30 to $70 per $100,000 borrowed.
If you can’t save up 20%, you may qualify for an FHA loan, which requires as little as 3.5% down. Both VA and USDA loans have zero down payment options, and there are programs offering down payment assistance to those who qualify.
The best part about rent-to-own properties, though, is that some come with rent credits. With a rent credit, a percentage of your rent will go toward your required down payment. Calculate in advance how much you’ll have in that escrow account at the end of your lease to make sure you save enough to supplement it.
What are the pros of rent-to-own?
Rent-to-own homes can be a great option, especially during a tight housing market. If there’s a house you want to buy, but you can’t make a down payment or your credit isn’t where it should be, it could be a great workaround. Here are some of the biggest benefits of rent-to-own agreements.
Rent May Go Toward Purchase Price
Depending on the terms of the rental agreement, renting to own could help you work toward paying for the home. Instead of the full amount of your rent being pocketed by a landlord, a percentage of your rent could go toward the eventual purchase price. Before signing, pay attention to rent credits and try to negotiate the best deal possible.
The Purchase Price Is Locked In
When a landlord agrees to a lease option, the home’s purchase price is written into the contract. That price will typically be higher than what the market says it’s currently worth. This means if the U.S. housing market sees an unexpected increase, you’ll be buying the home for less than its value. Even if the market dips, once you purchase the house and remain there for a few years, you may be able to sell it at a profit.
You’ll Buy Extra Time
For many renters, the rent-to-own period provides time to qualify for a mortgage. If you’ve researched all the options and found you’re close but not quite there yet, a rental period could be just what you need.
Before you choose this option, though, take a look at your circumstances. If substantial existing debt and poor credit mean you won’t qualify, you may need more than the few years you’ll get with a rent-to-own agreement.
No Moving Necessary
Let’s face it. Moving can be a pain. You have to pack everything up, line up a moving truck and get help moving, and unpack your items once you’re in the new location.
With a rent-to-own agreement in place, you skip the hassle of moving. You’ve already been in that home, making monthly rent payments, for at least a couple of years. You’ll simply go through the closing process and switch from rent payments to mortgage payments.
What are the cons of rent-to-own?
If you can get a mortgage, that’s always going to be a better option than renting or leasing to own. But there are some instances where renting without the buy option could be better for you. Here are some things to consider.
Rent-to-Own Home Maintenance
Before you sign any lease agreement, it’s important to read the fine print. One thing to note, specific to own agreements, is who will be responsible for maintenance during the rent-to-own period. If you rent without the promise of eventual ownership, your landlord will take care of those costs. In some cases, rent-to-own agreements require the renter to handle all repairs.
But there’s an upside to handling repairs on your own. To your landlord, the property is technically yours. That means you likely will give it more TLC. Still, it’s well worth it to pay for a home inspection before you agree to a rent-to-own agreement. This will identify any serious issues that will need to be addressed before you buy.
Option Fee
One distinguishing feature of a rent-to-own property is the option fee. This is usually between 1 and 5% of the purchase price and is non-refundable. That means if you don’t ultimately qualify for a mortgage, you’ll lose that money.
Home Values Could Drop
Property values aren’t guaranteed. Your landlord estimates the value of the property, but if you’re in a rising market, you might get that home at a steal. While that’s good news for you, the reverse can happen. If housing prices drop substantially during that time frame, you could find yourself buying a property for more than it’s worth.
Contract Breaches Can Be Costly
Rental agreements are a legal obligation. If you don’t pay your rent, your landlord can evict you and keep your security deposit. But rent-to-own contracts bring an additional level of risk. Missed payments mean you could be evicted and lose all the money you’ve put in. That includes the upfront fee and any rent credit you’ve earned.
All that money will also be lost if you can’t qualify for a mortgage when your rental time is up. These agreements can give you some breathing room. However, if your low credit scores, income, lack of a down payment, or employment situation make you ineligible for a mortgage, you could be searching for another rental while losing everything you’ve paid on the lease-to-own home.
Steps to Buy a Rent-to-Own Home
Once you’ve decided renting to own is the route you want to take, you may wonder what to do next. The following steps can help you ensure you get the best deal in a rent-to-own agreement.
1. Find a Home
This is more challenging than it might sound, especially if you’re looking in a competitive real estate market. Rent-to-own homes are extremely rare, so you may have to find a home for sale and try to negotiate this type of setup.
Typically, homeowners become renters when they can’t sell their homes. This means your rent-to-own contract might be on a home that’s in a less desirable or convenient area of town. For someone whose home has been on the market for a while, being able to collect rent money with the promise of a sale in a few years can be a huge relief.
For best results, find a real estate agent who can help you track down a home and negotiate with the seller. The National Association of REALTORS® maintains a directory of real estate agents, but you can also ask for a referral or find real estate agents nearby who have brokered these types of deals recently.
2. Research the Home
Even if it’s tough to find a lease-to-own home in your area, don’t snatch up the first one you find. Crunch the numbers to make sure the rent and purchase price make financial sense for you. Look at the sale history of the home to verify that the owner’s estimated purchase price is somewhat within what the median home price will likely be when your lease expires.
3. Research the Seller
The seller needs to be looked into as well. This is even more important with rent-to-own agreements since this person will be your landlord for the entire lease period. If you see any red flags during your interactions with the seller, move on.
4. Choose the Right Terms
Before you make a real estate purchase, you would have a closing attorney review the documents. The same goes for a rent-to-own agreement. Run all the paperwork past a real estate attorney to make sure there’s nothing in the contract that will hurt you in the long run.
Your real estate agent should be able to negotiate the best terms for you, including how each rent credit will help you build equity and what happens at the end of the lease.
5. Get a Property Inspection
Any time you make a home purchase, it’s essential to know what you’re buying. The same is true for rent-to-own properties. A home inspector can check things out and make sure you aren’t purchasing a home with serious issues.
6. Start Preparing to Buy
Once you start making rent payments, it’s time to start preparing for your eventual home purchase. Chances are, you’ll have to make a sizable down payment on a home loan, so plan to have that ready. Also, keep an eye on your score with all three credit bureaus and make sure you’ll qualify.
A rent-to-own contract can be a good deal for both the buyer and the seller. It can give you time to save money and improve your credit score. A real estate lawyer should take a look at your contracts and make sure your best interests are protected.
Bottom Line
Rent-to-own homes present a unique option for potential homeowners. This approach offers the opportunity to enter the homeownership arena at a slower pace, allowing individuals to build credit, save for a down payment, and experience living in the home before making a final purchase decision.
However, the rent-to-own path isn’t free from drawbacks. Potential buyers should be wary of unfavorable terms, higher monthly payments, and the risk of losing money if they decide not to buy. Ultimately, like all significant decisions in life, choosing a rent-to-own option requires careful consideration and thorough research.
Frequently Asked Questions
Where can I find rent-to-own houses?
Rent-to-own houses can be found through specialized websites dedicated to these types of listings, local real estate agents familiar with the concept, or sometimes through classified advertisements in local newspapers or online platforms.
Can I find rent-to-own homes on Zillow?
Yes, Zillow does list rent-to-own homes. When searching for properties, you can filter the search results to show only rent-to-own options. However, availability may vary based on the region and market conditions.
How long is the typical rent-to-own contract?
The typical lease term ranges from one to five years, but terms can vary based on the agreement between the homeowner and tenant.
Do I have to buy the house at the end of the lease?
No, the decision to buy is optional. However, if you decide not to purchase, you may lose any upfront fees or additional monthly amounts set aside for the potential purchase.
Can the seller change the purchase price once set?
Generally, the purchase price is fixed in the initial agreement. However, some contracts may have clauses allowing price adjustments based on market conditions.
What happens if the property value decreases during the lease period?
If the home’s value decreases and you’ve agreed on a set purchase price, you could end up paying more than the current market value. It’s crucial to negotiate terms that protect your interests.
Who is responsible for repairs and maintenance?
The agreement should clearly outline these responsibilities. In most cases, the tenant bears the responsibility for maintenance and repairs during the lease term.
What’s the benefit of a rent-to-own agreement for sellers?
Sellers can generate rental income while waiting to sell, often at a premium. It also widens the pool of potential buyers, especially those who need time to improve their credit or save for a down payment.
How do property taxes work in a rent-to-own agreement?
In a rent-to-own scenario, the property taxes are typically the responsibility of the homeowner, as they still retain ownership of the property during the rental period. However, the specific arrangement can vary based on the terms of the agreement.
Some contracts may stipulate that the tenant pays the property taxes directly or reimburses the homeowner. It’s crucial for both parties to clearly understand and agree upon who will cover the property tax obligation before entering into a rent-to-own contract.
If I don’t buy, do I get a refund for the extra money paid?
Typically, the extra money paid above regular rent, often referred to as “rent premium,” is forfeited if you decide not to buy.
Is the rent in a rent-to-own agreement higher than usual?
Often, yes. A portion of the monthly rent may be used for the potential down payment or purchase price, making it higher than the average rent for similar properties.
What’s the difference between rent-to-own and mortgage?
Rent-to-own is an agreement where a tenant rents a property with the option to buy it at the end of the lease. No bank is involved initially, and the tenant isn’t obligated to buy. A mortgage, on the other hand, is a loan specifically for purchasing a property. The buyer borrows money from a bank or lender and agrees to pay it back with interest over a predetermined period.
Does rent-to-own hurt your credit?
A rent-to-own agreement, in itself, doesn’t usually affect your credit. However, if the homeowner reports late payments to credit bureaus, it could hurt your credit score. On the positive side, consistently paying on time and eventually securing a mortgage can benefit your credit.
What is another name for rent-to-own?
Rent-to-own agreements can go by various names, including:
Lease to purchase
Lease option
Rent-to-buy
Rent-to-purchase option
Lease purchase
Each of these terms represents the concept of renting a property with the potential option to buy it after a set period.
Refinancing your mortgage can be a smart financial move if you do it the right way. You can tap into your home equity, get a lower interest rate, or even shorten or lengthen the terms of your loan. All of these are great outcomes for you and your wallet.
But here’s something that’s not so great: Picking the wrong mortgage refinance lender.
This one major mistake can potentially cost you tons of money in closing costs, hidden fees, and high interest rates.
You can avoid that by learning just a bit about what to expect throughout the refinance process and how to find the right lender. We’ll walk you through everything you need to know and give you some suggestions for the big decision.
9 Best Mortgage Refinance Lenders of 2023
We’ve compiled a list of the best mortgage refinance companies with the most competitive mortgage rates. Read through our short reviews to understand what kind of mortgage products they offer and how their process works. It’s an excellent resource for narrowing down your list of refinance lenders to consider.
1. loanDepot
loanDepot is a lender that values and earns customer loyalty. This is evident by their refinancing lifetime guarantee. Once you refinance with them the first time, they will waive their lender fees and reimburse your appraisal fee.
It’s also an excellent choice for people who like a person-to-person connection. You can call them at any time to talk directly to a loan officer.
This can be especially helpful for a refinance because there are many reasons for refinancing and many ways to refinance.
After defining your goals, they let you choose from both fixed-rate and adjustable-rate loans. There are other loan types available, such as jumbo and government, or even home equity loans. The minimum credit score is 620.
They are committed to customer satisfaction and back it up with extensive refinance products.
Terms and conditions apply.
Read our full review of loanDepot
2. LendingTree
LendingTree offers a ton of benefits when it comes to refinancing. First, the online process is very easy and can even get you a mortgage rate quote in under three minutes.
LendingTree isn’t a direct lender and instead matches you up with multiple loan offers with mortgage lenders, so you can compare your options.
Here’s why that’s so helpful.
It makes LendingTree’s refinance options much more robust than many other online lenders. For example, you can convert an adjustable-rate mortgage into a fixed rate or refinance your FHA loan or even VA loan.
You can also cash out home equity as part of your refinance or choose from multiple loan terms.
If you’re still in the information-gathering stage of your refinance journey, LendingTree’s website has many valuable resources.
Play around with numbers to check out different scenarios using tools like their refinance calculator and cost estimator.
Read our full review of LendingTree
3. Rocket Mortgage
Another driving force in the online refinance marketplace is Rocket Mortgage, which is part of Quicken Loans.
The application process is straightforward and can be completed entirely online. You can pick your goal for your refinance to help Rocket tailor your loan offers.
You can even link your financials and property information so that you don’t have to gather and upload all the documentation manually. In fact, 98% of financial institutions in the U.S. can be imported for both your bank statements and investment assets.
Rocket Mortgage also allows you not only to browse different options but also customize them. You can choose from a traditional mortgage product, FHA loans, VA loans, USDA loans as well as fixed or adjustable rates. The minimum credit score is 620.
For an exceptional customer service focused experience that’s entirely based online, Rocket Mortgage is certainly worth exploring.
Read our full review of Rocket Mortgage
4. New American Funding
Another direct lender, New American Funding, is a mortgage company that simplifies the online mortgage process. Get started by selecting the type of real estate you want to refinance.
You can choose from:
Single family home
Condo
Townhouse
Multi-unit
Other
You’ll then answer a series of questions about your personal information, including the existing loan amount and your credit scores.
Afterward, you’ll get a quote estimate on the type of refinance loan you could potentially receive. You can also call the 800-number at any time to speak to one of New American Funding’s loan officers.
The average refinance saves their customers about $360 per month. So, they’re definitely worth checking out, especially if your goal is to lower your payment amount.
Read our full review of New American Funding
5. SoFi
SoFi started as a student loan refinance company and has recently branched out to mortgage refinancing as well. One of the key advantages here is that they go beyond the traditional credit score and base your qualification on high-tech algorithms using various criteria.
In addition to the typical refinance and cash-out refinance options, SoFi also offers a refinance product specific to paying off your student loan debt.
As a result, you could end up lowering your monthly mortgage payment on top of getting rid of your student loan payments.
SoFi lets you check your prequalification for a refinance in just two minutes without affecting your credit score. You can usually close on your new loan within 30 days, and you don’t have to pay any lender origination fees.
A final bonus? If you have an existing SoFi loan, you can qualify for an additional 0.125% rate discount on your refinance.
Read our full review of SoFi
6. Guaranteed Rate
This major lender has offices in each state (plus the District of Columbia) but also lets you get started using its Digital Mortgage platform.
Guaranteed Rate requires a minimum credit score of 620 for mortgage approval. However, alternative credit data, such as utility and rent payments, are considered in some cases.
Guaranteed Rate is highly rated for customer service. They consistently receive stellar customer reviews with a satisfaction rate above 95%.
Whether you want a completely online refinance experience or a more personal one, they deliver.
Read our full review of Guaranteed Rate
7. Carrington Mortgage Services
Carrington begins the process by asking you to select one of four goals:
Lowering your interest rate
Lowering your payments or consolidating debt
Remodeling your home
Getting cash out
Fill out a contact form to have them get in touch with you. Alternatively, you can call Carrington anytime between 7:00 a.m. and 6:00 p.m. PST, Monday through Friday.
If you like a lot of personal care and attention throughout the process, you’ll appreciate Carrington. Their mortgage professionals walk with you every step of the way to ensure you have a speedy and successful closing.
Read our full review of Carrington Mortgage Services
8. Bank of America
One of the biggest banks out there, Bank of America puts its resources to good use by creating a comprehensive and easy online user experience.
You can zip through the application from start to finish by uploading all of your supporting documentation and e-signing with a touch of your finger.
Plus, Bank of America practically has a complete offering of refinancing products, including fixed-rate loans, ARMs, jumbo loans, FHA loans, and VA loans. B of A’s interactive website also makes it easy to get a rough estimate of current mortgage interest rates.
All you have to do is type in your zip code and desired loan amount, and you can see where refinance rates start for various mortgage types.
If you already bank with B of A and are a Preferred Rewards member, you may also be eligible for a reduction of your mortgage origination fee anywhere between $200 and $600.
Read our full review of Bank of America
9. Chase
You don’t need to be a bank member to refinance with Chase. And if you prefer to work with a traditional bank over a strictly online lender or matching website, then Chase is a strong choice.
Start the process online by choosing one of two goals: lowering your monthly payment or cashing out your home equity.
From there, you can get started on the prequalification form. Be prepared to enter information on your current mortgage and your finances.
If you ever have a question before or during the application process, you can either call or connect with a home lending advisor in person in one of 28 states.
There are plenty of refinancing options available through Chase, including jumbo, FHA, VA, and HARP loans. As with most other lenders, the minimum credit score is also 620.
Read our full review of Chase
How does refinancing a mortgage work?
Applying for a refinance is very similar to applying for a home loan. It’s also important to note that you don’t have to use your current lender or servicer. You can pick any mortgage lender that you’d like for your refinance.
After shopping around for lenders and comparing your loan options, you’ll have to complete a formal application. This involves submitting your income and financial statements. The loan officer and underwriter will review your materials to make sure you can afford the new terms.
Mortgage Refinance Requirements
Mortgage refinance lenders are primarily concerned with three things: credit score, debt-to-income ratio, and average loan-to-value ratio (LTV).
Credit score: The minimum credit score for most mortgage refinance companies is around 620.
Debt-to-income ratio: Your monthly debt should not exceed 43% of your monthly take-home pay, just like a regular mortgage. In addition to personal loans and credit card debt, they also include your new mortgage payment in that number.
Loan-to-value ratio (LTV): Lenders would like to see a low loan-to-value ratio (LTV). Typically, you should have at least a 20% equity in your home. In addition to personal loans and credit card debt, they also include your new mortgage payment in that number.
You’ll be required to get an appraisal of your home as part of the process. This makes sure the property lives up to its estimated value and helps determine your total equity in the home. You don’t need to do anything special before the appraiser arrives. However, it is wise to clean and tidy up to make a favorable impression.
Thereafter, you just have to wait for closing. Usually, your lender lets you pick the date, time, and location. Next, they’ll send a notary who will walk you through signing the closing documents. Then, you’ll start fresh with your new payment schedule. If you’ve cashed out some of your home equity, you can typically receive a check or have it deposited directly into your bank account.
How to Choose a Lender to Refinance Your Mortgage
When you decide to refinance, picking the right lender is vital to your financial success.
Mortgage refinance lenders structure loans differently, depending on whether you want to minimize closing costs or lower monthly payments—or a combination of the two.
The first thing to look at is what kind of refinance loans the lender offers. For example, you can find FHA refinance loans with lower minimum credit score requirements than conventional loans if you’re looking for a government-backed refinance.
Loan Terms
Alternatively, you may want to refinance into a shorter term than the standard 30-year fixed mortgage. Look for mortgage refinance companies that offer multiple options, such as 10, 15, or 20-year mortgages. Then, you can compare refinance rates and payments and pick the best one.
As with any kind of loan, you also want to shop around for mortgage rates. Not every lender automatically offers the same interest rate or APR. You’ll also want to compare closing costs as part of the evaluation process. You need to know both your upfront costs and long-term costs in terms of interest.
Closing Costs
If you want to minimize the amount of cash you bring to the table, ask whether your closing costs can be rolled into the loan.
There are numerous ways you can tackle mortgage refinancing. That’s why picking the right refinance lender can make a huge difference. They can help you understand the pros and cons of different options, so you can make the right choice.
Don’t be afraid to ask questions. Ask for specific numbers, and talk to a few different lenders to get an idea of their recommendations and refinance process.
When to Refinance a Mortgage
Now that you’ve learned of the best refinance lenders out there, make sure you’re refinancing for the right reasons. Here are some of the most common reasons for refinancing a mortgage.
Lower Your Monthly Payments
It’s entirely possible to refinance to lower your payment amount. To save money over the life of your loan, you could refinance into a lower interest rate if mortgage rates have dropped since you got your loan. Or, if your credit score has improved, you might be able to qualify for a lower refinance rate as well.
If you’re having trouble making your payments, you could also consider refinancing into a longer loan term. This spreads out your existing mortgage amount over more years.
For example, if you’ve been paying your mortgage for 10 years on a 30-year loan, you could extend the existing 20 years over another 30 years. However, you should proceed with caution, depending on your financial situation and retirement plans.
Cash Out Your Home Equity
If you have equity in your home—at least 20%—you could potentially qualify for a cash-out refinance. This allows you to get a lump sum of money and then add that amount to your existing loan. Usually, you can borrow up to 80% of your equity.
Let’s take a look at an example.
Say your home is valued at $200,000, and your mortgage is down to $150,000. That leaves you with $50,000 in equity. The bank will let you borrow up to 80% of that, which is $40,000.
If you qualify for the mortgage, you could then refinance a total of $190,000. You can then use the cash for home renovations, college tuition, medical bills, high-interest debt, or anything else.
Change the Terms
Shorter loan terms typically come with lower mortgage rates since there’s less of a chance for you to default on the loan. Once you’ve paid off a portion of your current 30-year mortgage, you may be able to save on interest by switching to a 15-year mortgage.
If, for example, you’re 15 years into a 30-year fixed mortgage, you only have 15 years left to pay. So, you could potentially save thousands by getting a lower interest rate via an actual 15-year fixed mortgage.
Switch to a Fixed Rate Mortgage
If you initially took out an adjustable-rate mortgage (or ARM) and your fixed period is ending, you should consider refinancing your loan. There’s a cap on how high your adjustable mortgage can go. It could potentially be much higher than current fixed interest rates.
Talk to a lender to see the best option to avoid a significant jump in your monthly payment. And be sure to plan ahead since it can take time for the approval process to finish.
See also: How to Refinance Your Mortgage
When Not to Refinance
When shouldn’t you refinance? If your credit score has dropped significantly since you took out your original mortgage, you may be surprised by higher interest rates. Similarly, refinancing today may not save you money if you qualified for a rock-bottom rate during the recession.
Furthermore, consider that every mortgage refinance comes with closing costs, just like your initial home loan. Therefore, you need to make sure any financial benefits you expect to receive from your refinance outweigh the added closing costs.
All of these considerations can be discussed with a suitable lender, whether in person, on the phone, or online. Do the research it takes to make sure you’re making an intelligent decision on your next home refinance.
Frequently Asked Questions
What are the steps to refinancing a mortgage?
The process of refinancing a mortgage typically includes the following steps:
Determine if refinancing makes sense for your financial situation and goals.
Research and compare different mortgage lenders.
Choose the right lender and loan product for your needs.
Complete a formal application, providing all necessary income and financial documents.
Wait for the lender’s underwriting process, which includes verifying your information and appraising the home.
Once approved, arrange for a closing where you will sign all required documents.
Begin your new payment schedule, or receive your funds if you’ve done a cash-out refinance.
How does refinancing a mortgage affect my credit score?
Refinancing a mortgage can temporarily lower your credit score, as the lender will perform a hard credit check during the application process. This is typically a small drop and should recover over time as long as you continue to make regular, on-time payments. Additionally, the old mortgage will be marked as paid off on your credit report, which can be beneficial to your credit history in the long run.
What are some reasons I might not qualify for a mortgage refinance?
If your credit score has significantly dropped since you took out your original mortgage, you may not qualify for a favorable interest rate, making refinancing less beneficial. Additionally, if your debt-to-income ratio is too high, you may not qualify. Lastly, if you do not have sufficient equity in your home (usually at least 20%), you may not qualify for certain types of refinancing.
Can I refinance my mortgage with bad credit?
While it may be more difficult to refinance your mortgage with bad credit, it’s not impossible. Some lenders specialize in loans for individuals with poor credit, and government programs like the FHA refinance loans may have lower credit score requirements. However, be aware that you will likely be offered higher interest rates.
How much does it cost to refinance a mortgage?
The cost of refinancing a mortgage typically includes an origination fee, an application fee, an appraisal fee, and closing costs, among other potential costs. This can usually amount to between 2% and 6% of the loan amount. However, in some cases, you may be able to roll these costs into your loan to reduce your out-of-pocket expenses at closing.
Can I refinance my mortgage more than once?
Yes, you can refinance your mortgage more than once. However, it’s important to consider the costs of refinancing, such as closing costs and possible prepayment penalties, and weigh them against the benefits you expect to receive. You’ll want to make sure that refinancing makes financial sense each time.
What’s the difference between a cash-out refinance and a rate-and-term refinance?
In a cash-out refinance, you take out a new mortgage for more than what you currently owe, and then receive the difference in cash. This can be useful if you need to cover large expenses or consolidate higher-interest debt.
A rate-and-term refinance, on the other hand, changes the interest rate, the term length, or both of your existing mortgage, but you don’t receive any cash. This is typically done to lower monthly payments or to pay off the loan faster.
When should I consider a fixed-rate mortgage over an adjustable-rate mortgage?
A fixed-rate mortgage may be a better option if you plan to stay in your home for a long period of time and want predictable, stable monthly payments. On the other hand, an adjustable-rate mortgage (ARM) may initially offer a lower interest rate, but it can fluctuate over time. An ARM could be a suitable option if you plan to sell or refinance your home before the interest rate starts adjusting.
If you’re shopping for a luxury home, what can you do if you are self-employed or highly leveraged and won’t qualify for, or don’t want, a traditional mortgage?
Many buyers simply pay cash for their homes. According to ATTOM, a property-data provider, 33.12% of all sales nationally of single-family homes over $1 million in the second quarter of 2023 were cash deals.
But there are other ways to pay for a luxury home when a traditional mortgage product isn’t a good fit. Here are some creative alternatives to consider.
More: Gilded Age Townhouse in the Heart of Manhattan’s Upper West Side Offers Three Terraces and Two Gardens
Collateralize your investment portfolio.
These loans, known as investment credit lines, asset-based loans or margin loans, allow you to borrow against the securities you already hold in your brokerage account, whether they are stocks, bonds or alternative investments. The advantages, according to Michael Silver, a certified financial planner in Boca Raton, Fla., are that they have no application fees or closing costs, no financial documentation is required and your credit score and debt-to-income ratio aren’t considered. “It’s strictly based on your assets,” he said. “So, if somebody is highly leveraged or if they’re high-net worth but have bad credit, none of that matters.”
The interest rate on a margin loan fluctuates, however, and rising rates or declining asset values can result in the institution requiring the borrower to come up with additional assets to secure the loan. Silver said the interest rates on margin loans are typically 1% to 2% over the federal-funds rate (which was between 5.25% to 5.5% on Oct. 6) and that most institutions will fund about 60% to 70% of the value of the pledged assets. These loans are beneficial for home buyers who don’t want to sell their assets to avoid paying capital-gains taxes, and borrowers who are self-employed or lack sufficient documentation to qualify for a mortgage. “I also recommend margin loans for people who want to buy a house and come in aggressively with cash, but they need to sell their current house,” Silver said. “If they got a bridge loan, they would have to go through the bank application process, but you can get a margin loan in a week.”
MANSION GLOBAL BOUTIQUE: Cozy Pieces to Outfit Your Home for Fall
Consider a cross-collateral loan.
Cross-collateralization can be used to purchase a primary home, a second home or an investment property. It simply means that multiple assets are used as security for a loan. For example, if you’re buying a $1 million house, and you apply for a traditional mortgage at an 80% loan-to-value ratio to avoid paying for private mortgage insurance, you would qualify for an $800,000 mortgage and have to come up with $200,000 in cash. If you own another home free and clear, by using a cross-collateral loan, the lender would combine the appraised values of both homes and finance up to 70%, the maximum loan-to-value ratio typically used by lenders who offer cross-collateral loans, according to Sarah Alvarez, vice president of mortgage banking for William Raveis Mortgage. So if your other home is worth $500,000, you would qualify for a $1,050,000 loan (70% x $1.5 million). “That allows you to get 100% financing for the million-dollar purchase, and private mortgage insurance is not required,” Alvarez said. The lender will mortgage both properties to secure the loan. The interest rate charged on a cross-collateral loan depends on a number of factors but is usually comparable to a traditional mortgage, Alvarez said.
Liquidate assets.
Another alternative financing method is to liquidate assets. In tight markets, offering to pay cash and close quickly can give buyers a competitive advantage. This strategy is usually best for home buyers who have substantial assets that can be liquidated quickly and easily, such as a stock portfolio, rather than real estate, which is a nonliquid asset that can take months to convert to cash. Bear in mind that liquidating assets can be a taxable event that triggers capital-gains taxes. Be wary of cashing out your 401(k) or other retirement account for cash. You’ll have to pay income tax on the money you withdraw from a 401(k), plus if you’re under age 59½, the Internal Revenue Service will assess a 10% penalty, although there are some exceptions to the penalty such as for total and permanent disability.
As president of the University of Pennsylvania, Amy Gutmann was one of the highest-paid administrators in the nation, receiving in her final year a nearly $23 million payout, largely made up of deferred compensation accrued over her 18-year tenure.
But that’s not all.
» READ MORE: Former Penn president Amy Gutmann earned nearly $23 million in 2021, but most of it was accrued over her 18 years as president
The university’s trustee compensation committee in late 2020 quietly authorized a $3.7 million, 0.38% interest home loan to Gutmann, according to tax records and financial disclosure forms. The loan was to help with her “presidential transition,” said Scott Bok, chairman of Penn’s board of trustees.
Advertisement
Specifically, Gutmann, 73, had lived in the president’s house on campus during her tenure, and she wanted to purchase a home to stay in Philadelphia. She left the presidency in February 2022 to serve as U.S. ambassador to Germany.
“While I won’t be living there while I’m ambassador, we have a place to come back to,” Gutmann said in a 2022 Inquirer interview, noting that she is on unpaid leave from the faculty. “Philly is our home.”
» READ MORE: Confirmed as the next U.S. ambassador to Germany, Amy Gutmann reflects on nearly 18 years as Penn’s president
Penn would not confirm what she purchased with her home loan, but deed records show that in December 2020 — 14 months before Gutmann left the university and two months after the loan was approved — her husband, Michael W. Doyle, a Columbia University professor, closed on a $3.6 million, four-story townhouse in a luxury housing development in the Fitler Square neighborhood. The purchaser’s mailing address on the deed lists “1 College Hall,” which houses administrative offices for the university.
While loans like this are neither illegal nor uncommon, some academics question whether they are financially sound and politically palatable for higher education institutions given the nation’s $1.77 trillion in student loan debt. Faculty and graduate students are striking across the country for better wages and benefits.
At Penn, tuition and room and board will top $84,000 in 2023-24, as the university raised costs 4% this year.
“This is the kind of thing that really undermines the public trust in higher education, particularly the public trust of these elite institutions that have a lot of money,” said Joni E. Finney, retired director of the Institute for Research on Higher Education at Penn. “Amy Gutmann made enough income to purchase that home without Penn’s help.”
Bok did not disclose the terms of the loan, but said it was “consistent with university policy and applicable laws and regulations.”
Gutmann did not respond to requests for comment.
Gutmann’s loans were among Penn’s largest
This home loan arrangement was not unique to Gutmann, nor to Penn.
The university, like some other elite colleges, for decades has provided generous loans to senior leaders, including deans, provosts and presidents. The loans were often for employee recruitment or retention purposes, helping the university attract the best leaders and enabling them to purchase property in Philadelphia’s expensive real estate market, Bok said.
The loans are legal. The U.S. Office of Government Ethics cleared Gutmann to serve as ambassador after she disclosed the loan.
Among Penn’s loan recipients, its largest has been to Gutmann, who also received two other loans from Penn earlier in her tenure, one marked “employee loan” for $700,000 in 2011 and another marked “retention/recruitment” for $1.25 million in 2014. Both were forgiven by the university over a number of years, Bok said.
However, the latest loan is not a form of compensation and is fully expected to be repaid, according to its terms, he said.
It appears she has not begun to pay back the loan. And the amount Gutmann owes to the university had slightly increased in the year since the loan was first extended, the most recent financial tax return shows.
In federal disclosure documents for the ambassador job, she said she will “refinance the loan with a different lender, pay market rate to the university for the remaining period of my government service, or pay off the loan” if the university extends her leave past the initial two years.
A necessary practice, or money misspent?
James Finkelstein, professor emeritus of public policy at George Mason University, who has been studying university president contracts and compensation since the 1990s, said Penn could have invested that money at a higher rate and made more income for the school. He noted that the interest rate she received was the second-lowest of its kind nationwide in more than a decade, and by comparison, the jumbo 30-year fixed rate for mortgages was 3.033% in October 2020 when she got the loan. Today’s rate is even higher, about 7.3%.
Giving the minimum interest rate set by the Internal Revenue Service at 0.38%, the loan would not be subject to taxation, he explained. It assumes that the money will be paid back in three to nine years, he said.
“Why does a university whose mission is educational need to loan this money?” Finkelstein asked. “These presidents are among the most highly paid university presidents in the country. Beyond their base pay, they receive bonuses and deferred compensation. Why is it at the end of their term, the trustees feel the need to reward them further by giving them these loans as they step down?”
Finney said faculty should be outraged.
“Especially as she was walking out the door, what kind of retention are they trying to achieve there?” she asked.
(A university tax record initially coded the $3.7 million as a “retention” loan, but in a later filing, after she was nominated to serve as ambassador, it was reclassified as a “special employee loan.”)
Others defended the arrangement, saying the job of presidents is extremely challenging, with their every move scrutinized and a responsibility for everything that happens at the institution virtually 24 hours a day.
“We’re asking these people to make a very unique kind of commitment,” said Brandon Cotton, president of the Washington- and Florida-based Cotton Law, which represents presidents, provosts and chancellors. “It should be rewarded. In [Gutmann’s] case, they found this method. In my opinion, it was a good method.”
Cotton said he has negotiated for presidents a number of loan agreements, which are often forgivable, and that happens when the leaders deliver outstanding performance.
Gutmann, by all measures, was credited with doing her job exceedingly well, giving Penn nearly two decades of sound and largely smooth leadership. She ran Philadelphia’s largest private employer, a $13.5 billion operation, with its 12 schools, six hospitals, and more than 23,000 full-time undergraduate and graduate students. As Penn’s longest-serving president, she raised more than $10 billion, oversaw construction of many new buildings, and led the school through a recession and pandemic.
» READ MORE: Amy Gutmann: Penn’s long-serving president seeks to bridge the divide | Industry Icons
Penn’s endowment more than quintupled from $4.1 billion, when she left her post as provost of Princeton and joined Penn in 2004, to $20.5 billion in 2022. Under her leadership, Penn prioritized student aid, adopting an all-grants, no-loan financial policy early on in her presidency. And by the time she left, 80% of Penn undergraduates were leaving Penn debt free, she had said.
Still, some say her compensation was simply too much. After news broke of Gutmann’s nearly $23 million payout in her final year, Jonathan Zimmerman, a Penn education professor, wrote a blistering column, asking where the outrage was over this arrangement. Gutmann’s total figure for 2021, reported on the 990 tax form, included her annual compensation of a base salary of $1.56 million and a bonus of $1 million and the $20.2 million deferred compensation and supplemental retirement funds, which also includes investment gains the money made over 17 years.
It did not include the loan.
“I have enormous respect for Amy Gutmann,” Zimmerman said. “I think she was a very successful president. I think presidents have incredibly hard jobs, for which they should be well compensated. But there’s well compensated and then there’s obscene. And we as a culture in higher education and beyond have lost sight of that distinction.”
Finkelstein said: “It’s about the fiduciary responsibility of the university trustees and their judgment.”
A common practice among elite universities
A review of financial tax documents for nearby universities found about two dozen similar home loans extended to staff at Swarthmore, Haverford and Princeton. Others across the United States, from Stanford to Columbia University, have also made similar loans, in some cases to presidents who were leaving.
Columbia gave its recently departed president, Lee Bollinger, a $6 million home loan, tax records show. The former president of the University of Southern California, C.L. Max Nikias, also got one for $3 million.
At some schools, these deals have drawn controversy. New York University notably extended low-interest loans to a former president and top professors to purchase pricey summer homes, drawing scrutiny in a 2013 New York Times investigation.
The loans aren’t always for homes. Drexel University gave its president, John A. Fry, who has been in the role since 2010, a $720,000 loan for an insurance policy, according to the university’s most recent tax filing. Drexel said the policy was purchased on behalf of Fry as part of his overall compensation package.
Over the years, Penn has given its loans varying labels, including “retention,” “recruitment,” “employee loan,” “mortgage assistance” and “special employee” loan. The loans are routinely for primary residences, not vacation homes, the university said. They are to help the employees secure residences near the school.
Penn’s most recent 990 form showed that it also currently has loans extended to Pam Grossman, who recently stepped down as dean of the Graduate School of Education, and Antonia M. Villarruel, dean of the nursing school. Each was for $150,000.
Gutmann’s 5,100-square-foot house, according to a real estate listing from before this sale, was described as a “new world of luxury,” featuring an entrance off a private courtyard, custom doors and millwork, a built-in two-car garage, an elevator, and a fitness center.
Several years were left on the property’s city tax abatement, which reduces the couple’s annual tax bill on the residence to about $6,800. The home has since increased in value by about a half-million dollars, according to online real estate estimates.
Ever wondered where Jen Landon — best known as “Teeter” from the immensely popular neo-Western drama series, Yellowstone — rests her head at night?
Landon, who first rose to fame playing Gwen Norbeck Munson in the CBS soap opera As the World Turns, a role that earned her three consecutive Daytime Emmy Awards for Outstanding Younger Actress in a Drama Series, owns a stylish architectural townhome in Venice, Calif., one that she’s now ready to part ways with. And it looks like she’s headed towards a speedy sale.
The Yellowstone actress listed her 2-bedroom, 2-bath home in mid-September, asking $1,795,000 for her stylish Venice pad. A couple of weeks later, the property is already under contract, with listing agents Katie Crain and John Podhor with Compass having already secured a buyer for the charming celebrity home.
Inside ‘Yellowstone’ actress Jen Landon’s house in Venice, Calif.
While it bears no resemblance to the sprawling Yellowstone ranch, Jen Landon’s house has quite a few noteworthy features, including a killer location in one of the most desirable pockets of Venice.
The 2-bedroom townhome is “perfectly located West of Lincoln and just a few blocks away from both Abbot Kinney and Rose Ave, close to the endless amount of incredible restaurants and shops that the neighborhood has to offer,” according to listing agent Katie Crain.
Built in 2009, the townhome sits behind lush bamboo hedges to ensure the utmost privacy for its current celebrity owner. And while it’s impressive by all accounts, the Yellowstone actress’s house is a refreshing change from the massive abodes Hollywood actors and TV stars tend to call home.
The home’s bright and eye-catching exterior fits right in with the vibrant, eclectic Venice community
The 2-bedroom, 2-bathroom residence boasts soaring ceilings, bamboo floors, and large glass windows throughout its somewhat modest 1,930 sq. ft.
The open living and dining areas flow seamlessly to an impressive kitchen that features PaperStone countertops, a breakfast bar, ample storage, and high-end appliances
The upstairs primary bedroom comes with a lounge area, custom closet, en-suite bathroom with a separate soaking tub, rain shower and dual vanity
The Venice townhouse has a generously sized rooftop deck with breathtaking 360-degree views, creating the perfect space for entertaining guests
The eco-friendly home’s expansive roof space can also be used to plant an edible garden, as it was designed and piped for this exact purpose
More stories
Where in the world does George Clooney live?
Inside Ellen Pompeo’s House and Multi-Million Dollar Real Estate Portfolio
Denzel Washington’s house, a mega-mansion he’s called home for 20+ years
Fried chicken, bourbon, bluegrass music and the Kentucky Derby. You might think that’s all Louisville has to offer, but you’d be wrong.
Louisville is the largest city in Kentucky and offers great restaurants, live events and the best entertainment around. It also boasts some of the most breathtaking natural beauty in the country.
As a resident here, you’ll have great neighbors, too. The residents here are incredibly friendly, and you can’t help but soak up their spirit.
Louisville is also in a great location, being just a few hours drive from other major metropolitan areas including Frankfort, Lexington and Cincinnati. If you love the idea of taking day trips, Louisville is the ideal city!
This city is also one of the most affordable places to live in Kentucky. It’s also more affordable than other large cities in the U.S., earning spots on multiple “25 cheapest places to rent in the U.S.” lists.
Does this sound like the city for you? If so, you might now wonder where to live in Louisville. We have you covered! Not only will we help you find a great Louisville neighborhood, but we’ll also help you find a great apartment for rent in Louisville.
Where to live in Louisville, KY
You don’t need to get frustrated figuring out where to live in Louisville. We can help you find the neighborhood — and then, the apartment — of your dreams! Check out our list of some of the top neighborhoods to find apartments for rent in Louisville.
Who’s coming with you?
Which one neighborhood characteristic can you not live without?
What’s your idea of quality downtime?
Which of these best describes your current life stage?
Your personal style could be best described as:
Which of the following is most important to you in choosing an apartment?
Where to Live in Louisville
Crescent Hill
If you love old-world charm and historic homes, as well as a good mix of modern and luxury homes and apartments, Crescent Hill is the neighborhood for you. This neighborhood is ideal for young professionals who have an active social life. You’ll find shopping, restaurants and bars in abundance and accessible by bike or on foot. Crescent Hill is the perfect neighborhood, too, for people who live an active lifestyle. There’s an aquatic center and mini-golf nearby, as well as multiple green spaces like Cherokee Park, which is perfect for walking your dog or hanging out with friends. But what really makes this neighborhood special is the architecture. There’s nothing more romantic and mysterious than old Gothic-style buildings.
Find Apartments in Crescent Hill
Highlands
Image Source: Highland Station
If you want a funky, hip, eclectic neighborhood in Louisville, look no further than Highlands. This community is just a few minutes south of the downtown area. The area has modern condos and apartment complexes, as well as historic Dutch-style and Victorian homes. If you’re a foodie, you’re going to love Highlands. Bardstown Row, known as Restaurant Row by the locals, has some of the best bars and restaurants in Louisville. Try The Eagle, a rustic yet chic beer hall. Or Havana Rumba for authentic Cuban cuisine. Or LouVino Highlands Restaurant & Wine Bar, a fashionable place to enjoy one (or more!) of the over 70 wines in their showcase.
Find Apartments in Highlands
Clifton Heights
Image Source: The Fitzroy
Residents praise this neighborhood for its low cost of living and high quality of life for young families. You’ll find budget-friendly rentals, whether you’re looking for a single-family home with a yard, a condo or a townhouse. There are plenty of green spaces for kids and dogs, like Louisville Champions Park where kids can play frisbee or soccer or simply hang out. For date night or family night, head to one of the many restaurants in the area, like Taqueria Los Gorditos for mouth-watering Mexican or Chik’n & Mi for Asian fusion. Clifton Heights has art and dance schools, venues where you can enjoy a symphony orchestra and taverns where you can meet up with friends and relax.
Find Apartments in Clifton Heights
Central Business District
If you’re a young professional looking for a walkable neighborhood, with stores and restaurants nearby, but without breaking the bank, you should check out the Central Business District of Louisville. In addition to being close to work downtown, the Central Business District has plenty of fun things to do and see, including high-end shopping experiences, entertaining community events and some of the best restaurants in Louisville.
Find Apartments in the Central Business District
Butchertown
Image Source: Waterside at Riverpark Place
Looking for a hip, quirky neighborhood in which to exercise all your artistic ambitions? Then, Butchertown is the place for you. Young couples and professionals appreciate the fun vibe and enjoy visiting funky boutiques, coffee shops and restaurants. You can find everything from vintage furniture to handmade soaps at the shops, as well as artisanal and gourmet foods. Looking for some excitement? Visit the Dave Armstrong Extreme Park, one of the most amazing skate parks in the country. The 40,000-square-foot skatepark has a wooden vert ramp and a 24-foot full pipe. The park is open 24 hours a day and park officials invite skaters of every level to come to have some fun.
Find Apartments in Butchertown
Tyler Park
Image Source: Highland Flats
Residents of Tyler Park praise the area for its friendly, caring neighbors and a strong sense of community. The family-friendly park — the namesake of this neighborhood — has beautiful trails and a playground for kids. There are also some nearby tennis courts. The Tyler Park neighborhood also has multiple nice dog parks nearby to take your furry friends for a good time. It’s a nice place to come home to if you work in Downtown Louisville and like getting away from the busyness of the city.
Find Apartments in Tyler Park
Deer Park
Image Source: 2114 Edgehill Rd
Deer Park is about four miles southeast of the downtown area. The neighborhood started out as a streetcar suburb. Starting in 1890, developers completed all 24 subdivisions by the mid-1930s. The beautiful, historic architecture gives the neighborhood lots of character. Deer Park is home to many young professionals. However, schools in the area rank higher than average, making it a great place to raise kids. Residents love that they can get to multiple destinations by foot — like the grocery and hardware stores, doctors and the vet. There are also multiple parks where you can go for a walk or jog or just enjoy the sunshine and fresh air.
Find Apartments in Deer Park
Phoenix Hill
Image Source: 310 at NuLu
If you’ve been wondering where to live in Louisville and want a community that has a dense urban vibe but is a bit cheaper than the downtown area, Phoenix Hill is for you. Situated around the affluent, trendy East Market District (called NuLu by the locals), the neighborhood has numerous boutiques that sell vintage clothing, restored furniture and gourmet, artisanal foods. Art is also important in this neighborhood. Local galleries stay open late on the first Friday of every month. During this street party, you’ll get to enjoy live music, tasty street food, art exhibits and shopping.
Find Apartments in Phoenix Hill
Rebecca Green is a content editor and writer for RentPath. She enjoys interior design, dogs and can tell you where to find the best pizza in Brooklyn. You can see some of her other published work on Apartment Guide.
As a homeowner, you probably have a rough sense of where your property starts and finishes. It might be the driveway, the border of your lawn, or even the fence you’ve set up as your visual marker. However, these familiar markers might not necessarily align with the official property lines. It’s worth considering where your property lines actually fall..
Before embarking on any outdoor projects, such as building a garage, replacing a fence, installing a pool, or enhancing your landscaping, it’s important to take a moment to evaluate your property’s true boundaries. This careful assessment ensures that you can savor the improvements you make to your home and yard without inadvertently encroaching on your neighbors’ territory or causing any potential disputes. So, whether you own a townhouse in Seattle, WA, or a home with 5 acres in Atlanta, GA, it’s important to be sure of where your property’s lines are located.
What are property lines?
Property lines are necessary during construction by the developer, city, county, or state to show where ownership of one plot of land starts and ends. A surveyor establishes the formal boundaries and marks them. When the property is legally split, the new property lines are established in a survey. The property line at the front of your house is known as your frontage, the measured distance across the front of the plot you own. The property lines on the side of your plot are known as sidelines. Local zoning laws often dictate these distances.
Why is it important to know the location of your property lines?
Property lines are the borders that tell you exactly where your property begins and ends. They keep one property owner from encroaching on another owner’s land or compromising their privacy by building too close to their house. A typical encroachment might be tree limbs that grow past your property and overhang into a neighbor’s roof or a driveway poured to extend onto a neighbor’s property. When you know exactly where your property lines fall, you’ll avoid accidentally encroaching on your neighbor’s land.
If you plan to build a permanent structure, you’ll want to be as accurate as possible, and ordering your own land survey is the best option. In most states, you are required to call a diggers hotline 811 to request buried utility information before you build a fence, plant a tree, or extend your driveway. This call ensures you know the location of any buried wires or irrigation systems to avoid causing damage. Within a few days’ notice, someone from your local utility company should be able to mark county wires or pipes with spray paint or flags.
Since property line information can be valuable to someone you may sell your house to, you will want to keep all records. Keep a copy of a new survey you’ve completed, a plat map, or any information from the city or county offices in digital or hard copy format. If you do a new survey, you may also need to register it with your county assessor or recorder. During the sale of a property, the title company will search for encroachment of one property into another. They may refuse title insurance to the seller if they find a property line dispute.
When you know how to find your property lines, you’ll gain peace of mind for any project that could come close to the edge of the property. Showing respect for your neighbor and their property rights can help you avoid a lawsuit.
To avoid issues with property lines and prevent confrontation with your neighbors, here are 12 easy ways to find property lines.
1. Use Google Maps to find property lines
In the world of digital mapping, it’s worth noting that Google Maps does have the capability to display property lines, although it’s not always a guaranteed feature. The availability of this information can vary due to several factors, and there may be instances where Google lacks access to the necessary data, resulting in the inability to provide property lines. However, it’s a simple process worth exploring to get an initial rough idea of your property’s lines.
You’ll want to start by navigating to the Google Maps website. Once you are on the website find the search bar located at the left side of the screen and type in your exact property address. Once you have searched, you’ll be presented with a standard grid-like GPS view. To switch to a satellite photo view, click on the “Layers” button.
Next, tap the “+” button located at the lower right-hand corner of the screen to continue zooming in. Continue to zoom in on the property you’re interested in until you spot those property lines. You’ll recognize them as slender gray lines. If these lines don’t pop up, it’s likely that this feature isn’t accessible in your region.
Are there other apps that show property lines?
Other GPS apps can provide you with accurate plat maps. LandGlide and Landgrid are two used most commonly by property owners.
LandGlide app: The LandGlide app uses GPS to pinpoint your property’s location accurately. The app includes parcel records in 3,000 counties throughout the country, covering more than 95% of the United States. The app is available on IOS and Android devices and it offers a free trial. A paid subscription service is available after your trial expires.
Landgrid Map: The Landgrid app allows users to view more than 149 million properties nationwide and includes ownership & address information. The app has a survey editor that will allow you to create your survey. The pro version allows users to access premium fields, bookmark properties, run surveys, and utilize various web features.
2. Hire a licensed land surveyor
The most accurate way to know where your land begins and ends is to hire a surveyor to determine your property lines. The property surveyor will first check county records to understand the history of the lot. Then they will find out about easements, subdivisions, and any other important factors that could affect your land and what you choose to do with it. The cost to hire a licensed land surveyor typically runs between $330 and $670 per survey and depending on the location, size, and property history, it could be up to $1,000 per survey.
2. Review your property deed
Your property deed will give you a tax description of your property. This tax description explains the boundaries of your plot of land. The description often references the names of subdivisions and other land references that may no longer be in the area, such as a row of trees. You can get a copy of your deed online or from your county recorder’s office for a fee.
3. Check the metes and bounds survey
A metes and bounds survey identifies a landmark to define the property boundaries, such as a tree, creek, road, or intersection. This is the “place of beginning” or POB. You can then use a compass to follow the directions provided. This survey can be hard to understand because it often uses landmarks that may no longer exist. For example, the survey may state that a property line extends “fifty meters from the tall maple.” However, that maple tree may no longer be standing.
4. Read the property line map, or ‘plat’
When you buy a house, you typically receive a plat map or property line map. If you don’t, you can find it at the county clerk’s office. The plat will give you the exact dimensions of your lot related to other lots on your block. For a property on a residential street, expect to see similarly sized rectangles lined up on each side of the street, showing each privately owned property. Every individual property will be labeled with an identifying number. This number is separate from the parcel number for tax purposes. Your neighbors may be able to help as well. You can ask them if they have a copy of their plat map, which would show the neighborhood.
5. Ask for the property survey from your mortgage or title company
If you finance your home purchase through a lender, the lender will typically require a property survey. Your mortgage company should have a copy of this survey from the purchase transaction. The title company will also run a property search and may have a copy of any surveys or property line maps completed for your property.
6. Review the existing property survey from your county or local municipality
Property surveys are public records and you can request a copy of any existing surveys from your county or local municipality. If the county or municipality has completed a survey for your plot of land, they will have a copy. They usually charge a fee to reproduce it.
7. Locate a hidden survey pin
During construction, builders often use survey pins to mark the plot of land. Look for thin iron bars staked into the ground in the general area you expect your property lines to be. A metal detector can be a helpful tool for your search along the perimeter of your property. You’ll often find survey pins close to a sidewalk or the curb of the property. However, survey pins can be misleading as utility companies, tree-removal companies, and other contractors may have moved them in the course of their work.
8. Look for property line markers
Locating property line markers is another alternative to finding survey pins. Property line markers can be made of metal, wood, or concrete. For a relatively new home, the property boundary markers might still be in place. If you find survey pins or concrete boundary markers, they are likely to be more accurate, as wooden stakes are more easily moved. Check your plat map to see where to look for property line markers.
9. Check sidewalks and street lights
Sidewalks and street lights can give you a good visual reference if you don’t know how to find property lines. While they are not a perfect reference, installers may have aligned sidewalks or streetlights with the property lines. Start by looking at the lines cut into the sidewalk in front of the house. A contractor may have cut lines to meet up with the edge of the property or used slightly different concrete to separate properties. This method is a good starting point but be sure to use it in conjunction with a survey or plat map to ensure accuracy.
10. Visit the local zoning department
Your municipality’s zoning department records plats showing land division, and will have maps drawn to scale for your property. Unless your home was built over a hundred years ago, you can ask for a copy of your neighborhood and lot plat for a minimal fee. The zoning department records will give you the exact dimensions of your lot.
11. Measure the property yourself
You could measure your lot by hand. To do this, you’ll need a long measuring tape, a compass, and perhaps an assistant. Retrace the surveyor’s steps by locating the starting point labeled on the plat. This will be the “common point” or POB. Once you find the starting point, use the measuring tape to follow the plat, recording measurements as you go. The plat measurements should correspond with the ones you record yourself.
As a homebuyer, exercise caution regarding property lines as you move through the purchasing process. The previous owners may have failed to account for property lines before they started various home improvements and could have encroached on a neighbor’s property. Ask your lender for a copy of the completed survey – you may learn that the property is smaller than you expected. Or, an encroachment issue could prompt you to renegotiate the deal or walk away altogether.
If you love the home, a suitable compromise could involve a boundary line agreement after the purchase. A boundary line agreement is a legal contract to settle disputes between neighbors over property boundaries and provides an agreement on property line usage without going to court.
There are fast, easy, precise, and cost-effective ways to find property lines, whether it’s for a property you own or one you plan to purchase. Make sure to gather accurate information when buying a home or starting any construction or landscaping project.